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Customer Lifetime Value Calculator

LTV tells you how much a customer is worth over their entire relationship. This determines how much you can spend to acquire them profitably.

Customer Revenue

$
Average transaction amount
per year
How often customers buy annually
years
Average relationship duration

Margins & Acquisition

%
Revenue minus COGS
$
Total cost to acquire one customer
%
For subscription businesses (optional)

Lifetime Value

Customer Lifetime Value -- Total revenue over customer lifespan
Gross LTV -- After gross margin
Annual Revenue Per Customer --

Unit Economics

LTV:CAC Ratio -- --
CAC Payback Period -- Months to recover acquisition cost
Maximum Affordable CAC -- At 3:1 LTV:CAC target

Business Health Indicators

LTV:CAC Ratio --
1:1 3:1 5:1

--

Payback Period --
6mo 12mo 18mo

--

Sensitivity Analysis

How LTV changes with different retention rates:

Monthly Churn Avg Lifespan LTV LTV:CAC

Industry Benchmarks

SaaS

LTV:CAC 3:1 - 5:1

Payback: 12-18 months

E-commerce

LTV:CAC 2:1 - 4:1

Payback: 3-6 months

Consumer Apps

LTV:CAC 3:1+

Payback: 6-12 months

Marketplaces

LTV:CAC 4:1+

Payback: 12-24 months

Understanding LTV

The golden ratio: A healthy LTV:CAC ratio is 3:1 or higher. Below 3:1, you're spending too much on acquisition. Above 5:1, you might be underinvesting in growth.

Payback period matters: Even with good LTV:CAC, a 24-month payback strains cash flow. Aim for 12 months or less, especially if you're growing fast.

Churn is the killer: Small improvements in retention have massive LTV impact. Reducing monthly churn from 5% to 3% nearly doubles customer lifespan.